UK Finance’s latest must–read blogs
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Conservatives in Focus: UK Finance at Conservative conference 2025
Last week, UK Finance was in Manchester for the Conservative Party’s autumn conference.
This was an important opportunity to understand the party’s direction of travel, connect with Conservative parliamentarians and create opportunities for our members to do the same.
The party’s annual gathering was marked by a noticeably quieter atmosphere compared to previous years, reflecting their ongoing evolution over a year after its electoral defeat in last summer’s general election.
With Kemi Badenoch MP stepping into her role as party leader following last year’s leadership election, this conference was an important platform for her and the shadow cabinet to outline their core principles and set the stage for future policy development.
Renewed focus on fiscal responsibility and economic growth
As part of our conference programme, we attended the Conservatives’ Business Day and hosted a range of our members at its Business Dinner.
During the day and evening, we heard from Kemi Badenoch, and had productive conversations with Shadow Chancellor Mel Stride MP, Shadow Business Secretary Andrew Griffiths MP and Shadow City Minister Mark Garnier MP.
At the Business Day lunch, Badenoch returned to the party’s traditional economic roots, centring her message on “living within our means” and a commitment to fiscal responsibility.
She highlighted the importance of fostering a competitive business environment to drive economic growth and warned about the risks to the economy posed by the UK’s regulatory and political landscape.
Particularly, she emphasised concerns for businesses flowing from regulatory burdens and tax considerations – issues UK Finance is actively addressing in its forthcoming representations to government as part of the Autumn Budget process.
Read the full blog by Jonathan Lima-Matthews , Principal, Head of Public Affairs, UK Finance .
AI adoption rises in compliance, but measurement still lags
It’s no secret that financial institutions are racing to adopt artificial intelligence (AI) across different areas of risk and compliance.
According to Moody’s study into AI in risk-related compliance, which surveyed 600 compliance professionals across sectors and regions, 53 per cent of respondents say they’re now actively using or trialling AI, up from just 30 per cent in 2023, and awareness is nearly universal at 91 per cent. But while AI systems can now take actions like routinely screening customers, detecting anomalies, and automating Know Your Customer (KYC) workflows, returns are mixed and, in many cases, they are still hard to measure.
Of the risk and compliance professionals who participated in Moody’s study, fewer than a third report a significant impact from AI to date. And among large firms (10,000+ employees), nearly a quarter say they can’t assess the impact at all.
This seeming mismatch between AI adoption and measurable value might raise concern—not because the technology doesn’t work, but because most firms are perhaps not measuring its impact. In fact, more than a third of compliance professionals surveyed admitted they aren’t tracking performance metrics, and that figure jumps to 41 per cent among respondents from banks.
Without evidence of AI’s performance, it may become harder to defend budgets, demonstrate value to boards, or establish that AI isn’t an unknown quantity within critical controls.
Where AI is working - and why
Moody’s study found that the organisations deriving the clearest benefits from AI are those with higher data maturity, and those that actively supervise AI’s outputs rather than leaving these unchecked.
Organisations who report the highest impacts are also the ones with more structured, accessible data, and a better understanding of where AI fits within their compliance frameworks. Respondents indicated that poorly structured or siloed data led to weaker outputs, regardless of the sophistication of the AI tools in use. But when organisations invest in high-quality, well-governed data, they appear to be giving AI the foundation it needs to work more effectively.
Read the full blog by Ted Datta , Head of Industry Practice Group for Europe & Africa, Moody's Corporation .
Addressing flood risk for a sustainable future
The Environment Agency’s 2025 Flood Action Week from 13 to 17 October sees the launch of the FloodReady property flood resilience review – a major piece of research and analysis commissioned by UK government involving successful collaboration across a range of industries and organisations.
UK Finance took part in this work, contributing views and expertise from the perspective of the mortgage lending industry.
Knowing and understanding the flood risk which a home faces, and how to mitigate it is vital now, more than ever, as climate change accelerates the frequency and severity of flooding across the country.
We welcome this review, which is an important step towards building a system where property flood risk is better understood, managed, and mitigated.
Surface water flooding is an increasing risk in urban areas, which are more densely developed and could have inadequate drainage. Large areas of paved surfaces in cities and towns can mean surface water has nowhere to drain easily and so inundates homes and businesses. Even paved front gardens and driveways can make the problem worse.
The FloodReady review highlights issues such as these and encourages homeowners to be flood aware, knowing the risk their property faces and being ready for flooding with property-level measures in place or to hand to address it. Simple inexpensive measures such as non-return valves, airbricks and vents as well as front door and garden gate barriers can be practical ways of reducing the risk of water getting into homes when floods happen.
But making homes more resilient and flood recoverable is only part of the solution. Action is needed on vital infrastructure such as larger scale engineering in the form of flood defences, which will require funding and investment. This, as well as tackling the availability and affordability of buildings insurance with flood cover, will ensure a more comprehensive whole-system approach for a sustainable future.
That’s why we’re keen to work with the insurance industry and the Flood Re scheme (a joint initiative between the government and insurers) to ensure affordable cover is available for homes that need it. This is part of a wider move to insurance pricing that reflects risk - where flood defences and individual property measures are installed and maintained.
To coincide with the launch of the FloodReady review, we’ve published a paper on the mortgage industry’s position on flood risk.
Read the full blog by John Marr , Principal, Devolved Government and Social Housing, UK Finance .
Latest findings from the 2025 Total Tax Contribution study of the UK banking sector
UK Finance has today published PwC ’s analysis about how much tax banks are paying in the UK and how the total tax rate for a typical corporate and investment bank in London compares with those of other financial services centres.
In summary, PwC estimate the total tax contribution of the UK banking sector to be £43.3 billion for the financial year to the end of March 2025, representing 4.3 per cent of total UK government tax receipts. The overall tax contribution has increased by a third since the study started in 2014 when it was £33.4 billion.
The UK’s total tax rate of the model corporate and investment bank has ticked up again this year by 0.6 percentage points, to 46.4 per cent, driven by changes to employer’s National Insurance Contributions (NICs) from April 2025. London’s rate remained higher than other financial centres including New York (27.9 per cent), Dublin (28.9 per cent), Frankfurt (38.9 per cent) and Amsterdam (42.2 per cent).
Our report demonstrates the stable and significant revenue the sector provides to the public finances, a trend which has seen the banking sector contribute on average more than £40 billion annually in taxes over the last five years.
Policymakers should consider our analysis, including the comparison with other key financial centers, in the context of the Leeds Reforms and Financial Services Growth and Competitiveness Strategy (FSGCS). As one of the eight key growth-driving sectors in the Industrial Strategy, financial services has been placed front and center of efforts to support growth in the UK economy.
Read the full blog by Sarah Wulff-Cochrane , Principal, Taxation Policy, UK Finance .
Service Recovery Blocks: A Pathway to Minimum Viable Service
In Resilience Testing: From Conjecture to Credibility, we explored the growing regulatory pressure for firms to provide credible, test-based evidence in their scenario testing.
This expectation ties to the increasing demand for organisations to maintain a “minimum viable service” (MVS) during the most severe but plausible scenarios, with the term appearing more frequently when discussing Important Business Service (IBS) recovery.
This shift has left many organisations searching for a way to bridge the gap between regulatory adherence, testing maturity and IBS recovery. One approach is to break down the technology estate into logical “service recovery blocks” (SRB) that support the restoration of MVS - the essential functions customers and colleagues need during a disruption. For some organisations, they will need to carefully consider how they define their MVS; to protect the safety and soundness of the firm, to avoid intolerable harm to the customer, or to ensure the financial stability of the economy. For some firms, these three objectives will result in the same MVS, but others may be left with conflicting regulatory requirements.
Technical foundations: Building the blocks
SRBs are built on the principle of modular recovery. Each SRB is a defined set of infrastructure, applications, and tooling that collectively enable a specific function within an IBS or core infrastructure, but are importantly distinct from an IBS. Blocks are mapped using architectural artefacts, CMDB data, existing IBS documentation and SMEs to identify dependencies and recovery priorities.
Initially, an organisation building an SRB would focus on the ‘foundation layer’ - this comprises the organisations core infrastructure components such as network access, authentication systems, monitoring tools, and hosting platforms. These must be restored first to enable IBS recovery. Once the foundation is in place, SRBs are defined for each IBS by identifying the minimum viable set of components required to deliver a basic version of the service. These components are grouped into logical blocks, sequenced based on technical dependencies and business impact, and ownership assigned to teams.
Implementation and use cases
By defining these blocks, organisations can:
Read the full blog by Beyond Blue Limited ’s Principal Consultant Lewis Churchill and Consultant Dr Amy Hughes-Stanley .
New UK fraud law: the international angle
Under the new Failure to Prevent Fraud even non-UK headquartered firms need to take notice. On 1 September 2025, the new failure to prevent fraud (FTPF) offence finally came in to force. Introduced in the Economic Crime and Corporate Transparency Act 2023, with guidance from the Home Office following in 2024, and a long process of preparation across the financial industry, conducting risk assessments and putting into place reasonable fraud prevention measures followed.
The FTPF offence puts the UK in an exclusive club – many countries have failure to prevent bribery offences, or general obligations to prevent fraud, but Italy is the only other country to have a strict liability criminal offence holdings firms responsible for the frauds committed by their employees.
Given the increasing divergence between the UK's financial crime regime and the rest of the world, it is understandable that many international organisations have taken time to come to grips with the potential scope of the new legislation.
All large organisations are caught by the offence – regardless of where in the world they are incorporated – and any parent organisations are liable for the actions of its employees, agents, or subsidiaries or other 'associated persons' – again, regardless of where in the world they are located.
This gives the offence significant extra-territoriality. The Home Office's guidance has made clear that "The offence will not apply to UK organisations whose overseas employees or subsidiaries commit fraud abroad with no UK nexus" but where there is a UK nexus the scope of potential liability for non-UK firms is significant. For example:
Read the full blog by Nick Price , Partner, Osborne Clarke .